SPY Weekly chart shown with a resistance line in weekly chart.
The resistance area is between 131 - 132.
But the bulls are getting good support from 20 and 50 day moving average. Price is trading well above 20 DMA which has a nice upward slope suggesting the strong up trend. Price falling below this would indicate some weakness.
Next chart will give some interest for bears as it shows negative divergence between price and force index. This has been diverging for quite sometime now without any major gains for bears. So one can expect a major correction soon. But Price has to confirm before negative divergence can take affect.
The next level to be broken is 5350. The entire up move towards 6338 took place from 5350 levels. So this level may show some fight. But the way bears have been taking out support levels this one too may go down easily because of the lack of buyers.
The next chart shows a possible bigger attack by bears before the consolidation starts taking place. We saw shortly after price breaking above 50 week moving average an election rally taking place. If price can give moves like that at the start of a bull market we should expect the same kind of moves at the start of a bear market too.
The above view may take place only if a bearish news come. Any way if we does not hold 5350 or 5300 levels we may see levels below 5000 soon.
The only way out for the bulls is to close price above 50 week moving average or the 200 DMA.
